Correlation Between Clearbridge Aggressive and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Clearbridge Aggressive and Clearbridge Value at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Clearbridge Aggressive and Clearbridge Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Aggressive Growth and Clearbridge Value Trust, you can compare the effects of market volatilities on Clearbridge Aggressive and Clearbridge Value and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Clearbridge Aggressive with a short position of Clearbridge Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Aggressive and Clearbridge Value.
Diversification Opportunities for Clearbridge Aggressive and Clearbridge Value
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust and Clearbridge Aggressive is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Clearbridge Aggressive Growth are associated (or correlated) with Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and Clearbridge Value go up and down completely randomly.
Pair Corralation between Clearbridge Aggressive and Clearbridge Value
Assuming the 90 days horizon Clearbridge Aggressive Growth is expected to generate 1.15 times more return on investment than Clearbridge Value. However, Clearbridge Aggressive is 1.15 times more volatile than Clearbridge Value Trust. It trades about 0.27 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about 0.22 per unit of risk. If you would invest 5,105 in Clearbridge Aggressive Growth on August 29, 2024 and sell it today you would earn a total of 348.00 from holding Clearbridge Aggressive Growth or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Aggressive Growth vs. Clearbridge Value Trust
Performance |
| Timeline |
| Clearbridge Aggressive |
| Clearbridge Value Trust |
Clearbridge Aggressive and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Aggressive and Clearbridge Value
The main advantage of trading using opposite Clearbridge Aggressive and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Aggressive position performs unexpectedly, Clearbridge Value can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clearbridge Value will offset losses from the drop in Clearbridge Value's long position.The idea behind Clearbridge Aggressive Growth and Clearbridge Value Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Clearbridge Value vs. Clearbridge Aggressive Growth | Clearbridge Value vs. Clearbridge Small Cap | Clearbridge Value vs. Qs International Equity | Clearbridge Value vs. Clearbridge Appreciation Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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